We've always wanted to buy a short-term rental home, but recently I've been seeing things like AirBnBust. Are short term rentals no longer profitable for new people entering the market?
Asked by Clayton | St John, IN| 03-06-2024| 701 views|Renting|Updated 2 years ago
They're not dead, but the easy money era is over. The market has matured and the margins have tightened, which means you have to be smarter about it now than you did in 2020 or 2021.
What happened is that a flood of new hosts entered the market during and after COVID when short-term rental income was insane. Supply caught up with demand in a lot of markets, and now many hosts are competing for fewer bookings at lower nightly rates. Add in rising property prices, higher interest rates, increased insurance costs, and local regulations cracking down on STRs, and the math doesn't work as easily as it used to.
That doesn't mean it's a bad investment. It means you have to pick the right market, the right property, and run the numbers conservatively. Markets with year-round tourism demand, limited hotel inventory, and STR-friendly regulations still perform well. Markets that are oversaturated with Airbnbs or have enacted strict STR ordinances are much harder to make work.
Before you buy, research the local STR regulations in whatever market you're considering. Some cities have banned or heavily restricted short-term rentals. Others require expensive permits and limit the number of days you can rent per year. Run your projected income using actual comp data from AirDNA or Mashvisor, not from the host's claimed income or a best-case scenario. And always run a backup scenario where you convert to a long-term rental, because if the STR market softens further in your area, you need an exit strategy that still cash flows.
This is a common question among Florida buyers and sellers, and the answer depends on your specific situation and local market conditions. Understanding the fundamentals before making any decisions protects your investment and your timeline.
In Citrus Springs, Citrus County, Florida, the real estate landscape has its own characteristics that affect how this plays out in practice. The Citrus County market attracts a diverse buyer pool including relocators from higher-cost states, retirees, and local move-up buyers, which creates consistent demand across most price points and property types.
The strategic approach is to work with a local agent who can pull current comparable sales data and walk you through the specific factors that apply to your situation in Florida. Every market is different at the neighborhood level, and decisions based on general advice or national headlines often miss the local nuances that matter most to your outcome.
Making informed decisions based on local data is always the strongest position.
Kevin Neely & Kaitlynd Robbins | K2 Sells
I would consult a local REALTOR to get te answer to this for the specifics of the area that you are looking to buy! Here on Lake Murray, SC I have 2 investors that are buying them and having great success! But there are areas, that have fallen under great restrictions and it depends on where they are located and the county or neighborhood rules.
Hello Carlos. It really depends on where you are hoping to purchase the STR. Many areas have regulations now and you need permits, etc. However, I personally own a STR and we are still doing well. I hope that helps! Best to you.